Pages

Friday, June 27, 2014

Specialty Grocers Battle For Business in Metro Atlanta

The first Atlanta area Sprouts Farmers Market opened to huge crowds last week in Snellville.

The next twelve to twenty four months are shaping up to be huge in metro Atlanta in the battle for grocery dollars in the rapidly growing specialty foods industry.

Greensboro, North Carolina-based The Fresh Market (NASDAQ: TFM)recently confirmed plans to open what will be its thirteenth location in Georgia, near Toco Hills. Austin, Texas-based Whole Foods Market (NASDAQ: WFM) plans to add two additional stores to metro Atlanta in addition to one opening this fall in Augusta. Phoenix, Arizona-based Sprouts Farmers Market (NASDAQ: SFM) recently opened its first Atlanta area location in Snellville, and has three other metro Atlanta locations slated to open later this year. Asheville, North Carolina-based Earth Fare plans to open at least two Atlanta area locations with others "proposed" but not "confirmed."

Sprouts Farmers Marketentered the metro Atlanta market earlier this month when it opened its first area location at The Shoppes at Webb Gin. Sprouts plans to open three additional locations between now and September.

In Dunwoody, Sprouts will open July 16th at Mount Vernon Shopping Center. The new Sprouts replaces what was most recently an Ace Homeplace store, and before that a Harris- Teeter. (Until recently, Kroger, which purchased many Harris Teeter locations, had continued to pay the lease on the empty building to prevent competition from entering.)

In Peachtree Corners, Sprouts will anchor the new Fuqua Development project "Peachtree Corners Market." The new center is currently under construction and is located on Peachtree Parkway across the street from The Forum. The Sprouts at Peachtree Corners is scheduled to open August 20th.

Sprouts will open at Johns Creek Town Center September 17th. The store will open in a former Shoe Gallery space, adjacent to Stein-Mart. Johns Creek Town Center is located at the northwest corner of McGinnis Ferry Road and Peachtree Parkway in Johns Creek.

While the above mentioned stores have all been confirmed by Sprouts publicly, the stores listed below are confirmed by my sources, but a spokesperson at Sprouts in Phoenix refused to comment as to when (or whether) they may open.

In Smyrna, Sprouts will anchor Olde Ivy Village. The new center, near the intersection of South Cobb Drive and the East West Connector, was previously home to a vacant Home Depot Landscape Supply, but will soon welcome Sprouts and a number of new businesses. Del Taco and Krispy Kreme are slated to open later this year, while an industry source tells me Sprouts is not due to open until mid 2015.

Sprouts will also anchor the new "Sandy Springs Gateway" project being constructed on Roswell Road near Windsor Parkway in Sandy Springs. The Sprouts location is also reportedly on track for a "mid 2015" opening.

On Piedmont Avenue in Morningside, Sprouts will anchor another as-yet-unnamed Fuqua Development project. This store is slated for a late first/early second quarter 2016 opening.

In Roswell, Sprouts will open at Roswell Marketplace, which sits at the corner of Mansell Road and Alpharetta Highway, and was previously a Big Star grocery store. According to the property's website/site plan, this store is expected to open March 2015.

In Cumming, Sprouts is opening a store at Lakeland Plaza. Sprouts will open in place of a vacant Stein Mart in a center that also includes a vacant Kroger. This store was originally announced to open this year, but was delayed for unknown reasons, and will reportedly open during the first quarter of next year.

Earth Farewill open one of their first Atlanta area locations at the Collection at Forsyth (previously Avenues Forsyth). (EarthFare already operates stores in Athens and Martinez/Augusta) The Forsyth store will be built along Ronald Reagan Boulevard in a currently undeveloped portion of the center. Sources within EarthFare tell me this store is slated to open early next spring.

Earth Fare will also open a store at Peachtree Corners, occupying a space currently home to OfficeMax. OfficeMax is slated to close later this week, with EarthFare planning to open in mid December. The space was originally a Bruno's Supermarket. (When open, this may be one of the most competitive markets with Trader Joes in The Forum, Sprouts opening in Peachtree Corners Market and a large Whole Foods Market just north on State Bridge Road.)

Phase Two of Emory Point on Clifton Road near Emory University will also be home to a new Earth Fare. The new store, being built from the ground up, will anchor the project and should open late in the second quarter of next year. Parkway Pointe shopping center on Cobb Parkway in Vinings will reportedly also welcome an Earth Fare. At Parkway Pointe, Earth Fare will reportedly open on the first floor in a portion of the current Pier 1 Imports and all of the former Old Navy. (An Earth Fare representative was unable to confirm this location though it is present on a property site plan.)

Another Earth Fare has been proposed for Sandy Springs, but I have yet to hear it confirmed so it would be premature to announce an exact location.

Whole Foods Market plans to grow its current Georgia store count with plans for at least three new stores. Currently, the chain operates seven flagship Whole Foods Market stores as well as two Harry's Farmers Market locations. Whole Foods plans to open its new location at Avalon in Alpharetta this coming October. Whole Foods, along with a twelve screen Regal Cinemas, will anchor the long delayed "lifestyle center" on Old Milton Parkway, just off GA400.

Augusta will also receive a new Whole Foods store. The store will open on Washington Road at Washington Crossing Shopping Center. This store is reportedly on track for a "late fall 2014" opening.

Another as yet unnamed Fuqua Development project in Kennesaw at the corner of Cobb and Barrett Parkways will also be home to a Whole Foods Market. The store is not currently under construction and is reportedly not scheduled to open until 2016. Monrovia, California-based Trader Joe'scurrently operates six locations in metro Atlanta in addition to one in Athens. According to company representatives there are currently no plans for any additional Trader Joe's in metro Atlanta.

The Fresh Market recently confirmed its plans to open a new location at North Druid Hills and Briarcliff Roads not far from Toco Hills. The new store will open at "Brighten Park" (fka Loehmann's Plaza.) When confirming the store opening, a projected opening of "Summer 2015" was also announced.

Oh yeah, Your DeKalb Farmers Market near Decatur is also expanding in a HUGE way. The local farmers market has started to clear land (it had already acquired years earlier in a Walt Disney-like master plan in anticipation of tremendous growth.) The current 142,000 square foot retail space will more than double in size and may eventually be about 550,000 square feet. In addition, a major increase in warehouse space and more than 2,600 new parking spaces are coming to the property. The 100-plus-acre project is (sadly) expected to replace most of the wooded area between its current parking lot and DeKalb Industrial Way. Exact dates of the planned expansion remain unclear but current plans calls for the first phase to be finished sometime next year and the entire project to be completed in phases, ending no later than 2023.

Whole Foods Markets are often smaller than a Kroger but larger than the typical 25,000-35,000 square feet stores that The Fresh Market, Sprouts Farmers Market and EarthFare are often found occupying. Sprouts did a market buy for radio advertising last month ahead of of opening in Snellville. Interestingly enough, a short time later, Whole Foods started a radio advertising campaign where they emphasized the "whole" in their name. I'm a long time Atlanta radio listener and until this month I had never heard a Whole Foods radio ad.

As for everyone wanting for one of these grocers or similar store to open at the vacant Kroger/Harris Teeter in Brookhaven at Brookhaven Plaza, keep hoping. Kroger controls the nearly 45,000 anchor space and seems content to pay $40,000 monthly rent for that space to prevent competition from entering.

Though it seems implausible given the significant financial investments being made by each grocer in metro Atlanta, there has been talk of consolidation within the industry. Rumors of a Publix buyout of Whole Foods Market started earlier this month. Separately, there have been ongoing mentions of a potential for Sprouts/EarthFare/The Fresh Market to buy one another given their strengths in their respective regions and similar store sizes.

Where will you shop? Who should buy who? Have you been to the new Sprouts in Snellville? Where should one of these grocers open next? Do you think Your DeKalb Farmers Market will become too big? Please comment below and share your thoughts.

24 comments:

Anonymous
said...

As a vegan, this is all good news to me. Each of these stores (except Fresh Market) carries lots of vegan options that you can't typically find in Kroger or Publix, especially the pre-made items. I am interested to see how this plays out for these various brands, though, it seems like they'll end up cannabalizing each other sooner rather than later.

Very good article, Eli. I'm excited to see what happens in this space. Looking forward to the competition. Hopefully it will drive down prices.

I believe the Harry's location between Alpharetta and Roswell (on Upper Hembree Road) will close once Whole Foods opens at Avalon. The company will keep it as an office or possibly a warehouse of some sort. But it's in a poor location that doesn't fit the company's strategy of opening near higher density development.

Good article, but I am surprised that Trader Joe's was barely mentioned. Also the "old timers"Publix, Kroger,and Walmart are getting into the same game also. This will lead to mergers, price reductions, and failures.Just like the Market wars years ago that led to Bruno's, Harris Teeters, Cub Foods, Big Star, and A&P leaving the Metro. Should be interesting to see who wins and what big empty locations we will be left with.

I finished this early this morning and was clearly a little tired. I kept telling myself to include Trader Joe's and clearly forgot in the end. I have since added a small portion about TJ's and their Atlanta network.

I agree for the most part on Kroger but their expansion of existing / construction of new, large format stores has been off-putting to many who prefer "local" markets, smaller in size.

Trader Joe's seems to be content with their locations in the metro, after their initial push into Georgia. Right now, they're continuing their march into Florida, having already opened in Naples, Sarasota, Tampa, Gainesville, Tallahassee, and Miami. They opened a new store today in Winter Park (Orlando's high-end midtown suburb), will open 3 stores in Palm Beach Gardens, Boca Raton, and Delray Beach in September, and more to come in St Petersburg and Ft Lauderdale. They're always methodical in their expansion.

I can't believe it takes 2 years to redo the Morningside shopping center at Piedmont and Cheshire Bridge. Why did they have to completely tear it down? It's a complete eyesore the way they've fenced it off. Couldn't the existing tenants just be replaced rather then tearing the buildings down and waiting 2 years for any improvement? That's crazy. But that's Atlanta. Tear everything down and rebuild from the ground up.

I noticed the Sprouts coming soon sign is up in Smyrna on the corner of S. Cobb and East-West Conn. Also, the Krispy Kreme has been open for a few months now and I think the Del Taco is already open or very close to opening. The signs were were up on the building a few weeks ago.

Really excited by all of these new grocery options. I'd love to see the existing mainstream grocers like Publix and Kroger refurbish their intown stores (what a gross waste of space the Murder Kroger on Ponce is - a huge missed opportunity by Kroger) and expand their organic offerings. Hopefully Wal-Mart's big push into organics will help in that regard.

Thanks for giving us this comprehensive overview of what's in store (pun?).

If you're feeling creative, I'd love to see a box chart that shows various foods/products listed on the horizontal columns and the store names listed on the vertical columns. Then, where the columns intersect, put a check mark to show which foods/products would be available at each store. This would help us determine which store meets our needs.

I'm really hoping the Marietta Harry's stays open past development of the Kennesaw Whole Foods. But overall this is all very exciting for food lovers, and vegans, as these new stores will offer more choices than the existing Kroger and Publix stores.

Krispy Kreme at Smyrna's Olde Ivy Village opened in February (2014). The Del Taco building is under construction, signage is up, and appears to be close to opening. The Sprouts sign has already been put up out front although construction on the main building doesn't appear to have started.

The marketing information at Columbia Properties' site about Olde Ivy Village suggests a Uncle Maddio's Pizza Joint may open there, too.

With radio buys, it is standard practice for radios sales weasels to look at their spot buys and then call up competitors and attempt to book ads for both sides at the same time. So surely somebody called Whole Foods and said "hey, these other guys are doing a campaign, do you want to respond?"

Trader Joes does a small ad campaign. Not enough to be effective so not sure why they bother at all.

I am really applauding the folks who were responsible for planning the Sprouts Snellville location. The bustling area up to this point never quite had anything like a Whole Foods or Trader Joes. I understand why a store like WF never entered this market, but it really puzzled (and quite frankly saddened) me that Snellville never had ANY type of "healthy" grocery store, especially given the demographics of the area surrounding Scenic Highway 124. This was an EXCELLENT move on Sprouts' part, for both the residents of Snellville, who have long been looking for this type of store to open in the area, and for the company itself, as there is no direct competition from any other "healthy" grocery store in the immediate area. I think they'll be around to stay for quite a while.

The comment about the morningside development makes zero sense. This is going to be a multi level mixed use development. Did you expect them to stack a new apartment complex on top of those 60 year old old shopping center buildings? duh

Agree with Anonymous that the Sprouts in Snellville / Shoppes at Webb Gin was desperately needed. This shopping corridor on Scenic Hwy is the 3rd busiest in Gwinnett behind MOG and Sugarloaf Mills. No other specialty grocer has bothered to look at that still growing area. Sprouts will do very well in Snellville!

I'm glad to see other organic food stores and more fresh market stores opening up. Alpharetta was particularly hard hit by the closing of Harrys. The new Avalon has far fewer food choices, a very small parking lot and I seldom shop here now but have shifted to Sprouts and Fresh Market, Trader Joes.I wish someone else would put up a store here and push Whole Foods out of the Alpharetta market. We need a larger bigger organic market store similar to the old Harrys not an Avalon store which never has what I want anymore. I spend 1/20th or less of what I used to at that store driving to stores like Fresh Market and Sprouts which are further away.